Macroeconomics For Dummies Pdf
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Free Macroeconomics For Dummies PDF Download

Macroeconomics For Dummies Pdf

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Free Macroeconomics For Dummies PDF Download

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People have to make choices because of scarcity, the fact that they don’t have enough resources to satisfy all their wants. Economics studies how people allocate resources among alternative uses. Macroeconomics studies national economies, and microeconomics studies the behavior of individual people and individual firms. Economists assume that people work toward maximizing their utility, or happiness, and firms act to maximize profits.

Eyeing the Four Basic Market Structures

An industry consists of all firms making similar or identical products. An industry’s market structure depends on the number of firms in the industry and how they compete. Here are the four basic market structures:

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Perfect competition: Spotify windows 7 app 64. Perfect competition happens when numerous small firms compete against each other. Firms in a competitive industry produce the socially optimal output level at the minimum possible cost per unit.
Monopoly: I cant download files. A monopoly is a firm that has no competitors in its industry. It reduces output to drive up prices and increase profits. By doing so, it produces less than the socially optimal output level and produces at higher costs than competitive firms.
Oligopoly: An oligopoly is an industry with only a few firms. If they collude, they reduce output and drive up profits the way a monopoly does. However, because of strong incentives to cheat on collusive agreements, oligopoly firms often end up competing against each other.
Monopolistic competition: In monopolistic competition, an industry contains many competing firms, each of which has a similar but at least slightly different product. Spotify 18 app. Restaurants, for example, all serve food but of different types and in different locations. Production costs are above what could be achieved if all the firms sold identical products, but consumers benefit from the variety.

Finding Market Equilibrium Price and Quantity

Buyers and sellers interact in markets. Market equilibrium occurs when the desires of buyers and sellers align exactly so that neither group has reason to change its behavior. The market equilibrium price, p^*, and equilibrium quantity, q^*, are determined by where the demand curve of the buyers, D, crosses the supply curve of the sellers, S. At that price, the amount that the buyers demand equals the amount that the sellers offer.

In the absence of externalities (costs or benefits that fall on persons not directly involved in an activity), the market equilibrium quantity, q^*, is also the socially optimal output level. For each unit from 0 up to q^*, the demand curve is above the supply curve, meaning that people are willing to pay more to buy those units than they cost to produce. There are gains from producing and then consuming those units.

Macroeconomics For Dummies Free Download